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Posts tagged ‘IHS Global Insight’

Unemployment Rates Rise in a Third of States.


Employers cut jobs in 20 states last month, suggesting modest improvement in the job market this year is not enough to benefit all areas of the country.

The Labor Department said Friday that 29 states added jobs, while Montana showed no net gain or loss in August. Unemployment rates rose in 18 states, fell in 17 and were unchanged in 15.

“The picture is decidedly mixed,” said Jim Diffley, chief US regional economist at IHS Global Insight. “We’re still optimistic about the improvement (in hiring), but it’s been slow.”

Nationally, the economy added 169,000 jobs in August, a modest gain but hardly enough to suggest a robust job market. The U.S. unemployment rate was 7.3 percent.

The tepid hiring gains mean that most states still have fewer jobs than they did when the recession began in December 2007. IHS Global Insight forecasts that only 18 states will have returned to their pre-recession job levels by the end of this year.

Overall, the United States still has 1.9 million fewer jobs than before the recession. Hiring has averaged just 155,000 a month since April. That’s down from an average of 205,000 in the first four months.

Nevada’s payrolls rose 11,200. Still, its unemployment rate remained 9.5 percent, the highest in the nation.

Louisiana added 14,000 jobs. Its unemployment rate was also unchanged, at 7 percent.

Illinois had the second-highest unemployment rate at 9.2 percent. North Dakota reported the lowest rate, at 3 percent.

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Growth in Sight for Eurozone Economy, but No Big Upturn, Reuters Poll Finds.


Growth will return to the eurozone‘s recession-mired economy in the second half of this year, but economists see no chance it will recover strongly until at least 2015, a Reuters poll showed on Tuesday.

The eurozone has been stuck in recession since the end of 2011 and data on Wednesday is expected to show the economy shrank again between January and March, by 0.1 percent.

However, the latest poll of 65 economists, taken this week, suggested that should be the end of its declining streak.

The economy is expected to stagnate in the current quarter, before eking out 0.2 percent growth for the next few quarters thereafter.

But with austerity and rising unemployment still taking its toll across the continent, few foresaw any prospect of growth picking up much before 2015 – especially with such deep divisions running between the eurozone’s constituent countries.

“Prospects for the euro area are bleak,” said Tatiana Fic, senior research fellow at Britain’s National Institute of Economic and Social Research.

“Growth divergences persist among euro area members. Further contractions in 2013 are projected for Greece, Italy, Portugal and Spain, while modest positive growth rates are projected for Austria, Belgium, Ireland and Germany.”

Although business surveys suggested German companies fared badly last month, data on Tuesday showed investor morale in Europe’s largest economy pointed to a timid recovery, which would help lift the wider eurozone.

However, austerity and tight credit conditions elsewhere will remain a drag.

“This is particularly true of the southern periphery eurozone countries, and we expected extended contraction in both Italy and Spain to weigh down appreciably on overall eurozone GDP in 2013,” said Howard Archer, chief UK and European economist at IHS Global Insight.

For those reasons, speculation has persisted about what else the European Central Bank might do to spur growth after it cut its main rate to a new record low 0.5 percent this month.

Some policymakers have talked openly of cutting the deposit rate below its current level of zero percent, which would mean charging banks to hold money overnight at the ECB – in theory persuading them to lend it instead.

Still, a majority of economists and traders polled in the past week think such a move is unlikely.

Whatever action the ECB decides to take, high inflation will not prove to be an obstacle. Inflation should remain comfortably below the ECB’s target ceiling of close to 2 percent until at least 2015, the poll showed.

Only five out of 40 economists thought inflation would exceed 2 percent in any quarter until the end of next year.

© 2013 Thomson/Reuters. All rights reserved.
Source: NEWSmax.com

Economy Adds Just 88,000 Jobs, Fewest in 9 Months, as Unemployment Falls to 7.6%.


U.S. employers added just 88,000 jobs in March, the fewest in nine months and a sharp retreat after a period of strong hiring. The slowdown may signal that the economy is heading into a weak spring.

The Labor Department said Friday that the unemployment rate dipped to 7.6 percent, the lowest in four years, from 7.7 percent. But the rate fell only because more people stopped looking for work. People who are out of work are no longer counted as unemployed once they stop looking for a job.

The percentage of working-age adults Americans with a job or looking for one fell to 63.3 percent in March, the lowest such figure in nearly 34 years.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

Stocks plummeted after the report. The Dow Jones Industrial Average dropped 110 points in late-morning trading. Broader indexes also declined.

March’s job gain was less than half the average of 196,000 jobs in the previous six months. The government said hiring was even stronger in January and February than previously estimated. January job growth was revised up from 119,000 to 148,000. February was revised from 236,000 to 268,000.

Several industries cut back sharply on hiring in March. Retailers cut 24,000 jobs after averaging 32,000 in the previous three months. Manufacturers cut 3,000 jobs after adding 19,000 the previous month. Financial services shed 2,000.

Some economists said retailers might have held back on hiring because March was colder than normal. That likely meant Americans bought fewer spring clothes and less garden equipment. Clothing stores shed 15,000 jobs, and building material and garden supply stores shed 10,000.

The Labor Department uses a survey of mostly large businesses and government agencies to determine how many jobs are added or lost each month. That’s the survey that produced the gain of 88,000 jobs for March.

The government uses a separate survey of households to calculate the unemployment rate. This survey found that the number of people either working or looking for work fell by nearly 500,000. It was the sharpest such drop since December 2010. And the number of Americans who said they were employed dropped nearly 210,000.

The percentage of working-age adults in the labor force is a figure that economists call the participation rate. At 63.3 percent, it’s the lowest since 1979. Normally during an economic recovery, an expanding economy lures job seekers back into the labor market. This time, many have stayed on the sidelines, and more have joined them.

Longer-term trends have helped keep the participation rate down. The vast generation of baby boomers has begun to retire. The share of men 20 and older in the labor force has dropped as manufacturing has shrunk.

Some who have left the job market are getting by on government aid, particularly Social Security’s program for the disabled. The share of women working or looking for work has plateaued, and fewer teenagers are working.

Heidi Shierholz, says the labor force participation among those ages 25 to 54 — “prime age” workers — has dropped to 81.1 percent. It hasn’t been lower since 1984.

This could be the fourth straight year that the economy and hiring have shown strength in the winter and early spring, only to weaken afterward. Last year, for example, job gains averaged 262,000 a month in the January-March quarter, but then fell to a pace of 108,000 in the April-June quarter.

Economists blame a range of factors for the trend. Europe’s financial crisis intensified in 2010 and 2011. And Japan’s earthquake and tsunami disrupted U.S. manufacturing in 2011. The government’s seasonal adjustment process may also be exaggerating the winter gains and depressing the summer figures.

In March, average hourly pay rose a penny, the smallest gain in five months. Average pay is just 1.8 percent higher than a year earlier, trailing the pace of inflation, which rose 2 percent in the past 12 months.

“This is not a good report through and through,” Dan Greenhaus, chief economic strategist at brokerage firm BTIG, said in a note to clients.

Some economists said they expect any weakening this spring to be milder than in the past three years.

“We don’t anticipate the slowdown becoming too severe, not when the housing recovery is firing on all cylinders, but it is a reminder that the U.S. is still unable to sustain what used to be just average rates of growth,” said Paul Ashworth, an economist at Capital Economics.

Gary Burtless, senior fellow in economic studies at the Brookings Institution, notes that some Americans have likely stopped looking for work because their unemployment benefits have run out. People must be looking for a job to qualify for unemployment benefits.

“If people aren’t collecting benefits, they have one less reason to be out pounding the pavement looking for a job,” Burtless says.

Most analysts think the economy strengthened from January through March, helped by the pickup in hiring, a sustained recovery in housing and steady consumer spending. Consumers stepped up purchases in January and February, even after Social Security taxes increased this year.

Still the higher taxes have reduced paychecks. And many economists say steep government spending cuts that began taking effect March 1 could slow growth in the spring and summer.

Nariman Behravesh, chief economist at IHS Global Insight, said employers may be slowing hiring in anticipation of the impact of the spending cuts.

As federal agencies and contractors cut back in coming months, Behravesh expects jobs growth to average 100,000 to 150,000 a month, down from an average 212,000 from December through February.

“The good news is that this is happening at a time when the private economy is gaining momentum,” Behravesh said. He expects hiring to pick up after mid-year.

Craig Alexander, chief economist with TD Bank Financial Group, said the economy isn’t growing fast enough to generate many jobs. He expects the economy to grow around 2 percent this year, a sluggish pace. He thinks it would be growing faster, perhaps at a 3 percent annual rate, if not for the Social Security tax increase and the federal budget cuts.

“Fiscal austerity is having an impact,” Alexander said.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Source: NEWSmax.com

UK recession fears grow as manufacturing drops.


LONDON (AP) — Concern is growing that the British economy may be headed back into recession after statistics released Friday showed a surprise drop in manufacturing activity.

The Office for National Statistics said manufacturing output fell by 0.3 percent between October and November, far off analysts’ expectations for an increase of 0.5 percent.

Britain’s economy has only just emerged from a double-dip recession in the third quarter of 2012, when it recorded 1 percent growth. But it seems unable to make a lasting recovery and experts say it is slowing considerably.

Vicky Redwood, chief U.K. economist at Capital Economics said November’s manufacturing figures “provided yet more evidence that the economy probably contracted in the fourth quarter of last year.”

The National Institute of Economic and Social Research, a leading think tank, estimated Friday that Britain’s economy shrank by 0.3 percent in the fourth quarter. That would leave gross domestic product flat overall in 2012.

If the British economy were to shrink again in the first three months of 2013, it would be back in recession, technically defined as two consecutive quarters of economic contraction.

The Bank of England has kept its key interest rate at its record low of 0.5 percent since March 2009 and implemented a monetary stimulus program to help the economy recover. But the recovery has been uneven due, among other things, to sharp government cutbacks, financial troubles among key trading partners in Europe and a deep restructuring in key economic sectors like the banking industry.

The Bank of England this week held off increasing the size of its stimulus program — under which it buys government bonds from banks to increase the amount of money flowing in the economy — as it waits for the impact of previous stimulus to take effect. Analysts say the central bank may yet approve more stimulus in coming months if the economy keeps weakening.

Mervyn King, the governor or the Bank of England, warned in November that the economy could shrink in the last three months of 2012 as a boost from the Summer Olympics is reversed and that growth would remain sluggish into 2013.

British manufacturers, it seems, are being hurt by weak investment and lower public spending.

“Furthermore, consumers’ purchasing power is coming under renewed pressure from a move back up in inflation and muted earnings growth,” said Howard Archer, the chief U.K. economist for IHS Global Insight. “On top of this, a still uncertain and difficult economic environment risks some orders being delayed or even cancelled.”

Archer said the United States’ recent budget deal to avoid the so-called fiscal cliff and improvements in eurozone financial markets did offer some hope for British manufacturing exports.

But it may take some time before the increase in confidence in financial markets translates to greater demand for goods and new jobs.

Underlining the pressure felt by U.K. manufacturers, Japanese automaker Honda announced Friday it would cut about one in four jobs at its western England factory.

Honda Motor Europe cited poor sales across the continent as the reason for cutting 800 positions from its 3,500-strong workforce in Swindon. The plant makes the Civic, Jazz and CR-V models.

Source. YAHOO NEWS.

By DANICA KIRKA | Associated Press

US hiring likely held steady last month even as White House, Congress battled over budget.


WASHINGTON – U.S. employers likely kept hiring last month at a modest but steady pace, despite tense negotiations that pushed the economy to the brink of the fiscal cliff.

Economists forecast that employers added 155,000 jobs in December, according to a survey by FactSet. That would be slightly higher than November’s 148,000. The unemployment rate is projected to remain at 7.7 per cent.

Stable hiring would mean the job market held up during the talks between Congress and the White House over tax increases and spending cuts that were not resolved until the new year.

A trio of encouraging reports Thursday on private hiring and layoffs suggested companies did not panic last month, although the Labor Department report will offer a more accurate measure of how businesses responded to the uncertainty in Washington.

“Given that we have restraints, the labour market data do appear to be improving,” said Dana Saporta, an economist at Credit Suisse.

While Congress and the White House reached a deal this week that removed the threat of income tax increases on most Americans, they postponed the more difficult decisions on cutting spending. And the government must also increase its $16.4 trillion borrowing limit by around late February or risk defaulting on its debt.

Congressional Republicans are pressing for deep spending cuts in return for any increase in the borrowing limit. President Barack Obama has repeatedly said he wants the issues kept separate.

Depending on December’s figure, hiring may finish the year slightly below its 2011 pace.

Employers added 1.84 million jobs in 2011, the most in five years. In the first 11 months of 2012, employers added 1.67 million. Job gains would have to top 170,000 in December to push 2012 ahead of the previous year. Some economists do expect gains at that level or higher.

On a monthly basis, the differences are slight. Job gains averaged 151,500 a month in the first 11 months of 2012, compared with 153,000 in 2011.

Hiring probably won’t rise above the current 150,000 per month trend until after the borrowing limit is resolved, economists say.

A similar fight over raising the debt ceiling in 2011 was only settled at the last hour and nearly brought the nation to the brink of default.

“That’s not an environment where you’re likely to be taking risks,” such as adding jobs, said Nigel Gault, chief U.S. economist at IHS Global Insight.

Reports Thursday indicated the job market is improving slightly.

The most encouraging sign came from payroll provider ADP. Its monthly employment survey showed businesses added 215,000 jobs last month, the most in 10 months and much higher than November’s total of 148,000.

Economists tend to approach the ADP survey with some skepticism because it has diverged sharply at times from the government’s job figures.

But some economists were also hopeful after seeing businesses were less inclined to cut jobs last month.

Outplacement firm Challenger, Gray & Christmas said that the number of announced job cuts fell 43 per cent in December from November, and overall planned layoffs in 2012 fell to the lowest level since 1997.

The decline in layoffs coincided with a drop last month in the number of people who applied for unemployment benefits. The four-week average was little changed at 360,000 last week. That’s only slightly above the previous week’s 359,750, which was the lowest since March 2008.

Still, the unemployment rate remains high. It fell to 7.7 per cent in November from 7.9 per cent in October. But that was mostly because many of the unemployed stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work.

There are signs the economy is improving. The once-battered housing market is recovering, which should lead to more construction jobs this year. Companies ordered more long-lasting manufactured goods in November, a sign they are investing more in equipment and software. And Americans spent more in November. Consumer spending drives nearly 70 per cent of economic growth.

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Follow Chris Rugaber at http://Twitter.com/ChrisRugaber

Source: YAHOO NEWS.

By Christopher S. Rugaber, The Associated Press | Associated Press

US job market resilient despite budget fight.


  • In this Wednesday, Dec. 12 2012 photo a job seeker leaves his contact information with a potential employer during a job fair in New York. More Americans sought unemployment benefits in the last week of 2012, though the winter holidays likely distorted the data for the second straight week. (AP Photo/Mary Altaffer)

    Enlarge PhotoAssociated Press/Mary Altaffer – In this Wednesday, Dec. 12 2012 photo a job seeker leaves his contact information with a potential employer during a job fair in New York. More Americans sought unemployment …more 

WASHINGTON (AP) — The U.S. job market showed resilience in three reports Thursday, suggesting it may be able to withstand a federal budget battle that threatens more economic uncertainty in coming months.

A survey showed private hiring increased last month, while layoffs declined and applications forunemployment benefits stayed near a four-year low. The data led some economists to raise their forecasts for December job growth one day before the government releases its closely watched employment report.

“The job market held firm in December despite the intensifying fiscal cliff negotiations,” said Mark Zandi, chief economist at Moody’s Analytics. “Businesses even became somewhat more aggressive in their hiring at year end.”

The most encouraging sign came from payroll provider ADP. Its monthly employment survey showed businesses added 215,000 jobs last month, the most in 10 months and much higher than November’s total of 148,000.

Economists tend to approach the ADP survey with some skepticism because it has diverged sharply at times from the government’s job figures. The Labor Department releases its employment report Friday.

But some economists were also hopeful after seeing businesses were less inclined to cut jobs last month.

Outplacement firm Challenger, Gray & Christmas said that the number of announced job cuts fell 43 percent in December from November, and overall planned layoffs in 2012 fell to the lowest level since 1997.

The decline in layoffs coincided with a drop last month in the number of people who applied for unemployment benefits. The four-week average was little changed at 360,000 last week. That’s only slightly above the previous week’s 359,750, which was the lowest since March 2008.

Most economists expect the Labor Department report will show employers added about 150,000 jobs last month and the unemployment rate stayed at 7.7 percent.

Some economists saw potential for stronger gains after seeing Thursday’s data.

Joseph LaVorgna, chief U.S. economist at Deutsche Bank, raised his forecast for job growth in December to 190,000 jobs, up from 150,000.

Credit Suisse increased its forecast to 185,000, up from 165,000.

“Given that we have restraints, the labor market data do appear to be improving,” said Dana Saporta, an economist at Credit Suisse.

Still, many economists remained cautious about where the job market is headed. While Congress and the White House reached a deal this week that removed the threat of tax increases to most Americans, they postponed the more difficult decisions on cutting spending. And the government must also increase its $16.4 trillion borrowing limit by late February or risk defaulting on its debt.

Congressional Republicans are pressing for deep spending cuts in return for any increase in the borrowing limit. President Barack Obama has repeatedly said wants the issues kept separate.

The economy has added about 150,000 jobs a month, on average, over the past two years. That’s too few to rapidly lower the unemployment rate.

Hiring probably won’t rise above the current 150,000 per month trend until after the borrowing limit is resolved, economists say.

A similar fight over raising the borrowing limit in 2011 was only settled at the last hour and nearly brought the nation to the brink of default.

“That’s not an environment where you’re likely to be taking risks,” such as boosting hiring, said Nigel Gault, chief U.S. economist at IHS Global Insight.

Even with modest gains in hiring, the unemployment rate remains high. It fell to 7.7 percent in November from 7.9 percent in October. But that was mostly because many of the unemployed stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work.

The number of people receiving jobless benefits fell to 5.4 million in the week ended Dec. 15, the latest data available. That’s down about 70,000 from the previous week. The figure includes about 2.1 million people receiving emergency benefits paid for by the federal government. The White House and Congress agreed earlier this week to extend that program for another year.

There are signs the economy is improving. The once-battered housing market is recovering, which should lead to more construction jobs this year. Companies ordered more long-lasting manufactured goods in November, a sign they are investing more in equipment and software. And Americans spent more in November. Consumer spending drives nearly 70 percent of economic growth.

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AP Economics Writer Martin Crutsinger contributed to this report. Follow Chris Rugaber at http://Twitter.com/ChrisRugaber

Source: YAHOO NEWS.

By CHRISTOPHER S. RUGABER | Associated Press

Christmas, New Year’s travel busiest in 6 years.


A record 1 in 4 Americans will be driving 50 miles or more during the holiday season, AAA says

NEW YORK (AP) — This Christmas travel season could be the busiest in six years, with AAApredicting that 93.3 million Americans will hit the road. That’s 1.6 percent more than last year and just 400,000 people shy of the 2006 record.

This year, highways will be more crowded than ever, largely because finding a seat on a plane at a desirable price has gotten more difficult. AAA says 84.4 million people will drive at least 50 miles between Dec. 22 and Jan. 1 — a new record. That’s 90.5 percent of holiday travelers, up from 89.3 percent six years ago.

Put another way: one in four Americans will be driving long distances for Christmas and New Year‘s. So expect plenty of traffic jams, crowded highway rest stops and overflowing toll plazas.

“The year-end holiday season remains the least volatile of all travel holidays as Americans will not let economic conditions or high gas prices dictate if they go home for the holidays or kick off the New Year with a vacation,” say AAA president and CEO Robert Darbelnet.

The travel forecast done by IHS Global Insight for AAA is based on interviews with 655 Americans and factors in estimates about the overall health of the economy.

Drivers will see gas prices between $3.20 and $3.40 a gallon, on average, by New Year’s Day, according to AAA, one of the nation’s largest leisure travel agencies. Gas prices have dropped about 50 cents a gallon on average since September, but remain at record highs for this time of year.

The price of hotels and car rentals are also up. AAA three diamond lodgings are forecast to cost $129 a night, up $3 from last year. Two diamond properties are also up $3 a night to $95. Daily car rental rates will average $56, compared to $40 last year.

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Scott Mayerowitz can be reached at http://twitter.com/GlobeTrotScott.

Source: YAHOO NEWS.

By Scott Mayerowitz, AP Business Writer | Associated Press

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